The Supreme Court appears poised to reverse the conviction of a powerful New York political aide who took money in exchange for helping to facilitate a real estate development. Joseph Percoco was sentenced to six years in prison for violating a federal fraud law that makes it a crime to deprive members of the public of the intangible right to “honest services.” But justices of all ideological stripes were concerned on Monday that upholding the conviction of Percoco, who served as the manager of former Gov. Andrew Cuomo’s re-election campaign when he took the actions that led to his conviction, could have far-reaching effects for other private citizens – most notably, lobbyists.
In 2014, a developer paid Percoco $35,000 for his help to avoid having to enter into a “labor peace agreement” with local unions. Percoco urged the head of a state agency to allow the development to go forward without the need for such an agreement – which it did. A few days later, Percoco ended his job on Cuomo’s campaign and returned to his former role as a senior official in the governor’s office.
Representing Percoco, lawyer Yaakov Roth told the justices that when Percoco promoted the development he was a private citizen who did not receive a salary and “possessed no legal authority to bind the state or make decisions for it.” Although Percoco may have had influence within the state government because of his “years of public service” and his “close relationship to the Cuomo family,” that influence does not create any duty to the public and cannot be the basis for a bribery conviction, Roth said.
Instead, Roth continued, a bribery conviction requires a connection to actual power – that is, someone is taking a bribe in exchange for exercising power that he officially has or expects to have soon. The power can come by virtue of the individual’s position as a government official, Roth observed, or if he has been delegated that power as an agent of the government. And when someone has that kind of power, Roth explained, he has a duty to the public that can form the basis for a bribery conviction.
Roth faced questions about how far his proposed rule would extend. Justice Elena Kagan asked about a scenario in which a public official briefly resigns so that he can take a bribe but then returns to his job almost immediately. Under your theory, she suggested to Roth, the official couldn’t be charged under the bribery statute as long as he wasn’t in public office when he took the bribe.
But even if the justices believed that Percoco’s proposed rule might be underinclusive, they were far more concerned that the government’s proposed rule would be overinclusive, turning the proverbial “revolving door” between government service and the private sector into a pathway to prison.
Representing the federal government, Assistant to the U.S. Solicitor General Nicole Reaves told the justices that Percoco was effectively functioning as a government official when he “accepted multiple bribes” to instruct the state agency to reverse its decision that his client needed to reach a “labor peace agreement.” She outlined a three-part test to determine whether a private individual is functioning as a government official and therefore can be held liable under federal bribery laws: whether supervisors and subordinates recognize that someone is effectively operating as a government official; whether the individual has the power to command other employees to take a specific act; and whether there are other “trappings” of a government role.
But the justices were almost uniformly skeptical of the government’s argument. Chief Justice John Roberts observed that someone could meet the criteria that Reaves outlined without ever having any official responsibilities.
Kagan noted that although someone inside the government might be aware that a private citizen is functioning as a government official, someone outside the government – such as a lobbyist’s client – would not have any way to know that. And those outsiders, she emphasized, could also be prosecuted under federal public-corruption laws by paying the defendant. The government’s test, she stressed, “gives the outsider no real notice” that he could be violating the law.
Justice Neil Gorsuch asked Reaves to explain the origin of the government’s three-part test, noting that it is “certainly not in the text” of the federal bribery laws. When Reaves responded that the factors were “inherent in the nature of being a public official,” Gorsuch was unmoved, referring to “the brooding omnipresence of the law.”
Justice Samuel Alito asked Reaves to address a scenario involving “someone who is a super, super effective lobbyist”: a childhood friend and former teammate of an elected official who later worked as the official’s campaign manager.
Reaves countered that “mere influence is not enough to trigger” federal public-corruption laws, because the lobbyist wouldn’t actually be functioning as a government employee even if she had a close connection to one government official.
Gorsuch pushed back, telling Reaves that Washington, D.C., “is full of such persons” and that close advisers to presidents “are often taken quite seriously.” Many of those people, Gorsuch posited, would effectively be government officials under the government’s multi-part test “or at least they’d have to have a very long trial” to make that determination.
Justice Ketanji Brown Jackson chimed in, asking how to distinguish someone like Percoco from a lobbyist. Your test, she told Reaves, seems to “sweep in people” who “overstay their welcome” or keep in touch with former colleagues after leaving government employment.
Kagan appeared to agree. The “strongest part of your case,” she told Reaves, “is the fact that this is a guy who was a former government official” who took the action at the heart of the case while on a “hiatus” to run Cuomo’s campaign. But the government’s test, Kagan continued, doesn’t require any of those facts. Kagan asked Reaves for an example of “someone who is not a former official and is not a future official” who could still meet the government’s three-part test. But, she cautioned, it doesn’t seem possible without “making it look like the guy’s just a really, really good lobbyist.”
Justice Sonia Sotomayor wondered aloud why the government needed to rely on a “functional government official” theory at all. Instead, she asked, why can’t the test be whether, as Roth suggested, the private citizen is acting as an agent of the government?
Justice Clarence Thomas had a slightly different objection. He told Reaves that he was “curious” about New York’s failure to prosecute Percoco and deemed it “rather odd” that “this broad federal prosecution is taking place” under “what some have termed a catch-all provision.” In truth, he concluded, it seemed as if the federal government was “using a federal law to impose ethical standards on state activity.”
During his time at the lectern, Roth urged the justices to reverse the decision by the U.S. Court of Appeals for the 2nd Circuit upholding Percoco’s conviction on honest-services fraud and direct the lower courts to acquit him. Although the justices seemed inclined to do so, a decision in the case is not expected until sometime next year.
This post is also published on SCOTUSblog.